Anglo CEO rues lack of incentives for SA mining exploration
SA forgoing billions of rand in economic output in current operating environment, Duncan Wanblad says
SA is forgoing billions of rand in output as a result of the challenging business environment while a lack of incentives for mining exploration are further hobbling efforts to revive the moribund economy, according to Anglo American.
“We will never know the amount of investment that companies within and outside SA are choosing not to make in SA as a result of our very real challenges,” said Duncan Wanblad, CEO of the multinational mining company.
Speaking in Johannesburg at the second day of a mining conference on Thursday, Wanblad said SA held “extraordinary untapped potential”, but challenges such as load-shedding and logistics bottlenecks, which affected “the profitability and sustainability of our business”, have left industry leaders and investors “frustrated”.
Wanblad also echoed the sentiments expressed by speakers on the first day of the Joburg Indaba regarding the lack of investment in mining exploration, saying SA was “definitely under explored”.
Anglo American, he said, hasn’t prioritised exploration in SA for many years because it has been prioritising “areas most prospective for commodities being sought”.
“We also have to structurally look at how the system is set up for exploration in SA. I don’t think exploration in SA is in any way incentivised. For exploration to occur, SA would need to set up an environment that was more accommodative of ... a multiyear investment,” Wanblad added.
Given the amount of time and money companies have to invest in exploration, they also require certainty about the “security of the resources ... and the level of ownership of the resource”, he said.
SA’s share of global exploration spending has dropped to less than 1% from a peak of 5% in 2003, and it has remained stubbornly below 1% for more than a decade.
On Wednesday, mining leaders including as Errol Smart, CEO of Orion Minerals, and the recently appointed CEO of the Minerals Council of SA Mzila Mthenjane, said the country’s regulatory environment imposed too high an administrative burden on exploration companies.
The problem was worsened by the “dysfunctional and outdated” SA Mineral Resources Administration System (Samrad), which is operated by the department of mineral resources & energy.
Samrad’s inefficiencies resulted in a backlog of thousands of unprocessed mining and prospecting licences. In July, the department finally agreed to select a technology provider and purchase an off-the-shelf, online cadastral system — a move the industry has been urging for years.
Delivering the closing address at the conference, minister of mineral resources & energy Gwede Mantashe said his department has now selected a winning bidder to deliver “a modern cadastral system”.
Pending audit approval of the selection process, Mantashe said the department hoped to announce the winning bidder by the end of October and to get the new system running as soon as possible.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.